Zero Rated VAT on new build house. Any problem ?

[Water Wheel]

Are there any problems with getting a Builder to build my New Build house at zero VAT?

It’s been suggested that I will need to buy the materials, though I don’t see why .

Does the builder need to set up a dedicated account at the various suppliers for my build or anything along those lines?

We have just gone out to tender and are waiting replies . Wish we were two years further forward !

 

[steveR]

You will buy your materials cheaper than the builder supplies them to you... He takes a few %.

Get your architect to produce a schedule of materials to allow you to get quotes from various suppliers. Day to day, then yes, a dedicated trade account is worth having for convenience.

Are you VAT registered?? Is it for a farmhouse??

 

[br jones]

You will buy your materials cheaper than the builder supplies them to you... He takes a few %.

Get you architect to produce a schedule of materials to get quotes from various suppliers. Day to day, then yes, a dedicated trade account is worth having for convenience.

Are you VAT registered?? Is it for a farmhouse??

not all builders take a profit on materials,

 

[Exfarmer]

not all builders take a profit on materials,

They may not, but be aware that many builders merchants will quote prices , which have no relationship at all to what you will pay. This includes all manner of materials needed for biulding a new house.
Needed a new lock for a patio door.
Retail price £135 actually paid £32.

 

[teslacoils]

If it's a new build, you just claim the vat back anyway, surely? Form 431 from the website. Keep invoices, plans, pp and building regs sign off. Send in. Get vat back.

 

[Kidds]

The builder is not supposed to charge you VAT iirc. ie. new build is zero rated as far as the builder is concerned.
Materials the VAT is reclaimable at the end .

 

[Water Wheel]

I don't have time to get involved with buying materials or manageing the project just putting it out to tenter and let the builder get on with it. Me just being a pain in the backside checking every night.
Got a 44 page list of materials from QS for a 220 m sq retirement bungalow.
My guess is the builder should get better disscounts than me on materials and labour so hope his mark up equates with this.
I tried phoning merchants for prices in general terms and got nowhere quoted prices up to 10 x web based prices.

 

[Doing it for the kids]

I don't have time to get involved with buying materials or manageing the project just putting it out to tenter and let the builder get on with it. Me just being a pain in the backside checking every night.
Got a 44 page list of materials from QS for a 220 m sq retirement bungalow.
My guess is the builder should get better disscounts than me on materials and labour so hope his mark up equates with this.
I tried phoning merchants for prices in general terms and got nowhere quoted prices up to 10 x web based prices.

if you can hit pause I would for 2021

ive 6 projects live at the moment, all struggling to get some Materials to the point where the word on the street is that in a few weeks time works will stop as shelves are empty.

kingspan started quoting 4-6 weeks, I think they are now on 24 weeks!

Any quotes you do get will probably have a few weeks time restriction on them which is no help for a new build. It would take a ballsy builder to give you a fixed price now.

speaking to someone the other day, price for a 20ft container from India has gone up from $800 to $6,500 in the last 18 months. You can’t get much in a 20 footer.

2021 really ain’t the time to be building!

 

[steveR]

If it's a new build, you just claim the vat back anyway, surely? Form 431 from the website. Keep invoices, plans, pp and building regs sign off. Send in. Get vat back.

I have built two farm houses, in both cases, I built the property with materials purchased through the farm business, and claimed the VAT back as we went along...

VAT folks queried the massive hike in VAT I had reclaimedfor the most recent one in 2011/12 and my accountant told them the all was legit. business expenditure. Not sure what the situation is nowadays.

 

[steveR]

if you can hit pause I would for 2021

ive 6 projects live at the moment, all struggling to get some Materials to the point where the word on the street is that in a few weeks time works will stop as shelves are empty.

kingspan started quoting 4-6 weeks, I think they are now on 24 weeks!

Any quotes you do get will probably have a few weeks time restriction on them which is no help for a new build. It would take a ballsy builder to give you a fixed price now.

speaking to someone the other day, price for a 20ft container from India has gone up from $800 to $6,500 in the last 18 months. You can’t get much in a 20 footer.

2021 really ain’t the time to be building!

Or buying.... My daughter is trying to do a deal on one and is struggling with Agents and Lenders... I told her to wait 12 months and try again

 

[mo!]

Your builder shouldn't be invoicing the VAT, if they do then you need to find a competent builder.

 

[Doing it for the kids]

Don’t they have to but at 0%? I think it has to be on the invoice

 

[br jones]

if you can hit pause I would for 2021

ive 6 projects live at the moment, all struggling to get some Materials to the point where the word on the street is that in a few weeks time works will stop as shelves are empty.

kingspan started quoting 4-6 weeks, I think they are now on 24 weeks!

Any quotes you do get will probably have a few weeks time restriction on them which is no help for a new build. It would take a ballsy builder to give you a fixed price now.

speaking to someone the other day, price for a 20ft container from India has gone up from $800 to $6,500 in the last 18 months. You can’t get much in a 20 footer.

2021 really ain’t the time to be building!

prices will not come back down again ,so get it built because price in builders merchants only go one way ,and it aint down

 

[George from SJM Planning]

Never been involved in this before (I try to avoid anything post planning) but do you not just claim.back the builders vat on the 431 just like the materials and other costs? Did the architect charge vat? SE? QS? Are they all reclaimable?

 

[mo!]

Don’t they have to but at 0%? I think it has to be on the invoice

Possibly, I don't remember seeing it on the invoices. When we built ours we simply couldn't have done it if we had to pay and claim back. We simply didn't have the available funds.

Also, if I recall correctly, you are only allowed one application, so you have to wait until the end of the project to get the VAT back. I'm sure we could have saved some money by project managing, but I've never regretted having a full service contract. There is a lot to be said for all those problems someone else's headache.

 

[Water Wheel]

if you can hit pause I would for 2021

ive 6 projects live at the moment, all struggling to get some Materials to the point where the word on the street is that in a few weeks time works will stop as shelves are empty.

kingspan started quoting 4-6 weeks, I think they are now on 24 weeks!

Any quotes you do get will probably have a few weeks time restriction on them which is no help for a new build. It would take a ballsy builder to give you a fixed price now.

speaking to someone the other day, price for a 20ft container from India has gone up from $800 to $6,500 in the last 18 months. You can’t get much in a 20 footer.

2021 really ain’t the time to be building!

Don't like your answer but fully understand what you are saying. We will see what responce we get to the tender document.
The alternative argument is if every one hits pause what are the builders going to do? So that should put a bit of downward pressure on quotes

 

[AJ123]

I don’t quite follow, if it’s a new build why cant your builder buy the materials himself, claim the vat back and then not charge you vat on his invoice? it’s a while since I built mine but I’m pretty sure that is how it worked.

A conversion is very different rules but I don t know much more than that.

 

[Water Wheel]

A neighbour who has built several houses ,lived in them a couple of years then moved on to the next suggested I should be buying the materials to avoid problems, hence the question.

From the replies it sounds as though there shouldn’t be a problem.

The main problem I could see was if the builder was working on several projects at once buying materials at the same time on the same account, especially incidental items that he call in for at the merchants on his way.

 

[mo!]

A neighbour who has built several houses ,lived in them a couple of years then moved on to the next suggested I should be buying the materials to avoid problems, hence the question.

From the replies it sounds as though there shouldn’t be a problem.

The main problem I could see was if the builder was working on several projects at once buying materials at the same time on the same account, especially incidental items that he call in for at the merchants on his way.

If you are buying the materials then you have the problems. Builder buys then you are the customer. That service doesn't come free, how much you value that service is up to you.

Personally, I am a farmer and not a builder.

 

[Poorbuthappy]

Be careful if its an ag tie. Can complicate matters somewhat, to the point of not being able to claim all the vat.